News Update

India, China hold fresh dialogue for complete disengagement on Western borders: MEAThakur says India is prepared for 2036 OlympicsCBDT substitutes Form in ITR-5EV Revolution: Lessons for India to learn from US and China!London court green-signals auction of luxury apartment of fugitive Nirav ModiGovt consults RBI; finalises borrowing plan for first half of FY 2024-25Gadkari says Farmers’ protest is politically-motivatedVP calls upon women entrepreneurs to be 'Vocal for Local'America offers USD 10 mn bounty for information on ‘Blackcat’ hackers after UnitedHealth gets hitI-T- The order of the ITSC can only be reopened in cases of fraud or misrepresentation: HC8 persons including Hezbollah militants killed in Israeli strike on LebanonI-T - Income so surrendered on account of investment in excess stock during course of survey cannot be brought to tax under deeming provisions of section 69B: ITATMacron pillories EU-South Africa trade deal; calls it ‘really bad’ in BrazilI-T-Power of revision need not be exercised where facts do not reveal any lack of enquiry by AO into relevant issue & when twin requirements of order being erroneous as well as prejudicial to Revenue's interests, are not satisfied: ITATThailand’s Lower House okays Bill to legitimise same-sex marriageI-T -Penalty u/s 271(1)(c) cannot be imposed where an assessee claims deduction u/s 80P while being ineligible therefor, but being under the bona fide impression of being eligible for such benefit : ITATYellen warns China against clean energy dumpingCus - Enhancement of declared value of imported goods is not tenable, where Department adduces no material to show how the enhanced value was computed & where no cogent rationale is made out for rejecting declared value: CESTATMilky Way’s central black hole - Twisted magnetic field observedCus - Assessee has not proved beyond reasonable doubt that goods in question imported under air way bills/bills of entry were in fact filed by him and hence the only natural corollary available to Revenue is confiscation of same: CESTATSmall investors help Trump Media’s valuation skyrocket to USD 13 billionST - When the facts are in the knowledge of department subsequent SCN alleging suppression cannot be issued and entire demand was found beyond normal period of limitation: CESTATFM Nirmala Sitharaman declines to contest LS elections as she has no fundsST - Tripura State Rifles not required to pay Service Tax under heading of Security Services, as it is is not engaged in business of providing security services: CESTATJustice Ritu Raj Awasthi joins as Judicial member of LokpalCX - Clandestine removal alleged based on consumption of raw inputs and heightened electricity usage - Tax demands based on third party statements but without permitting cross examination of deponents; case remanded to allow this exercise: CESTAT
 
ST - Warehouses are specifically covered under term Railways and they need not necessarily belong to railways - no tax liability on construction of warehouse for CWC in railway premises: CESTAT

By TIOL News Service

MUMBAI, AUG 22, 2017: THE appellants are engaged in activity of construction for APMC and for CWC Warehouse located in Railway side.

The lower authorities demanded service tax from the appellant on the ground that they are engaged in providing 'Commercial and Industrial Construction Service'.

Before the CESTAT, the appellant submits that insofar as APMC is concerned, the same is a statutory body established to assist the farmers in sale and purchase of their produce and, therefore, since APMC is a charitable organization no service tax could be levied. The appellant rely on the decision of High Court in Income Tax Appeal No. 4/2006 and the order dt. 28.3.2007. It is further submitted that the contracts with APMC are inclusive of material and, therefore,are Works Contracts and no service tax could levied on the work done for APMC for the period prior to 1.6.2007.

In the matter of construction activity done for CWC, the appellant pleads that since the activity is conducted within the Railway premises, therefore, not covered by the definition of 'Commercial or Industrial Construction Service' as Railways is specifically excluded from the said service; that such warehouses constructed can be deemed to be a Transport Terminal and which are specifically excluded from the ambit of Commercial and Industrial Construction service. So also, the contract is inclusive of material and, therefore, are Works Contracts and no tax can be levied till 1.6.2007 when the works contract was made a taxable service.

The AR argued that CWC is paying fee to the Railways for the land allotted to them; that CWC is commercial organization; that the definition of charitable organization under the Income Tax Act cannot be applied to Central Excise Act.

The Bench observed that in appellants' own case the High Court had held that APMC is constituted for charitable purposes.

Extracting portions from the Board Circular No. 157/8/2012-ST dt. 27.4.2012 and Circular No. 80/10/2004-ST dt. 17.9.2004, the CESTAT concluded that the activities of APMC are not commercial in nature and, therefore, the contracts are not covered under the purview of commercial and industrial construction service.

As for the construction rendered for CWC, the Bench observed -

"5. It is seen that the definition of term Railways is very wide it covers not only all the rail lines, sidings and yards but also warehouses as is apparent from the definition under Railways Act, 1989. The part of the said definition is reproduced below:

"(31) "railway" means a railway, or any portion of a railway, for the public carriage of passengers or goods, and includes-

(a) all lands within the fences or other boundary marks indicating the limits of the land appurtenant to a railway;

(b) ……..

(c) ……..

(d) all rolling stock, stations, offices, warehouses, wharves, workshops, manufactories, fixed plant and machinery, road and streets, running rooms, rest housed, institutes, hospitals, water works and water supply installations staff dwellings and any other works constructed for the purpose of, or in connection with, railway;"

As can be seen that warehouses are specifically covered under the term Railways and they need not necessarily belong to railways. In these circumstances, it is immaterial if the said warehouses are used commercial or otherwise, as the same are not covered within the purview of commercial and industrial construction service the appeal on this count is also allowed…"

Both the appeals were allowed.

(See 2017-TIOL-3031-CESTAT-MUM)


POST YOUR COMMENTS
   

AR not Afar by SK Rahman

TIOL Tube Latest

Shri Shailendra Kumar, Trustee, TIOL Trust, giving welcome speech at TIOL Awards 2023




Shri M C Joshi, Former Chairman, CBDT




Address by Shri Buggana Rajendranath, Hon'ble Finance Minister of Andhra Pradesh at TIOL Awards 2023